Payroll processing is an arduous task for many employers. Before the advent of modern computer systems, payroll calculations were conducted manually and checks were written by hand. Accordingly, this system was replete with human error and resulted in substantial inefficiency. As personal, small business, and enterprise accounting software became ubiquitous, these inefficiencies were largely eliminated.
Along with the advancement of technologies, so too has the complexity and scope of payroll processing increased. Personal retirement accounts, flexible spending accounts, and a myriad of pre- and post-tax itemizations have transformed the simple pay calculations of the past to a maze of interdependencies. Software systems have also grown in complexity, and for many companies it has become more cost-effective to outsource their payroll processing to a third party. Among other benefits, outsourcing eliminates the need to maintain in-house staff and decreases liability and work required to maintain compliance with ever-changing legislative requirements.
For those who do not have the luxury of outsourcing their payroll, as well as for payroll processing companies themselves, a myriad of payroll software solutions exist. As expected, these software solutions allow employers to print paychecks and paystubs, and are also increasingly integrated with other financial software applications both inside and outside of the company.